Donald Trump has shaken my faith that markets will remain free

Jun 6, 2018

Jeff Bergstrom

Jeff Bergstrom

CIO

First Read

Hits & Takes
JLN Staff

The Eurex US lawsuit against the CBOT/CME Group is still an open question, according to sources at IDX. I thought it was a done deal and the CME won, but that may have been a little premature as we await a final written ruling.~JJL

Among the many interesting pitches from the innovators’ session at IDX was Ascent Technologies’ CEO Brian Clark, who said its reg tech platform was able to update a new ruleset change by the FCA in 2.5 minutes, a process the regulator said takes them 18 hours.~JK

Brian Lynch, CEO of RegTech Solutions, said at IDX that the industry’s cost of compliance is $270 billion per year, and the cost of non-compliance is $321 billion annually.~JK

John Omahen, FIS’s senior vice president, product management, post trade derivatives, said the biggest challenge in technology today isn’t legacy systems, but finding expertise in data science and then marrying that with the futures markets.~JK

Today’s IDX Brexit panel audience poll showed that 47 percent believed Brexit would increase clearing costs for the end users.~JK

Futures For Kids has a new website to help them get their message out. The list of supporters is long and impressive. Please donate to Futures for Kids, or at least help Mark Ibbotson make his goal for the Kilt Challenge. He is up to 57 percent with £8,034.77 raised so far.~JJL

The Futures For Kids gala is tonight in London in conjunction with the end of IDX, and JLN’s Mike Forrester will be there to shoot some video of the industry band that will be playing. Others of us will be there to bang the close on the charity bidding.~JJL

Spencer Doar will be at the coinciding ALTSO event in London tonight.~JJL

Mark your calendars for ConFEAS 2018, which will be held on October 29-30 in Abu Dhabi, United Emirates. The Federation of Euro-Asian Stock Exchanges (FEAS) was created in 1995 in Istanbul, Turkey, but last year the decision was made to move the headquarters of FEAS to Yerevan, Armenia. The goal and mission of FEAS is to promote cooperation, development, collaboration and promotion of the capital markets of the Eurasian region (Europe, Asia, and the Mediterranean Sea). The FEAS website is www.feas.org.~JJL

Some things should not be messed with. IHOP says it’s changing iconic name; pancake lovers flip out.~JB

 

(Click for larger image)


Google Walks Away From America’s Security

It bowed to pressure instead of standing up for our country.
Michael R. Bloomberg – Bloomberg
Google’s decision not to renew a contract to develop artificial intelligence for the Defense Department was a victory for the employees who had protested it. It was also a defeat for U.S. national security, patriotism, and the cause of limiting civilian casualties in war.
/goo.gl/ZTMfaM

****JB: I wonder how the people who worked on the Manhattan Project would feel about this?

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Why Banks Are Losing the Battle for M.B.A. Talent
Laurence Fletcher and Pat Minczeski – WSJ
More M.B.A. graduates are choosing jobs in tech and consulting even as banks jack up starting salaries, a Wall Street Journal analysis shows.
/jlne.ws/2JBEe4J

****JB: Competition is good.

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The WFE Responds To ECB’s Consultation On Cyber Resilience Oversight Expectations (CROE) For Financial Market Infrastructures
WFE
The WFE Responds To ECB’s Consultation On Cyber Resilience Oversight Oversight Expectations (CROE) For Financial Market Infrastructures
Press Release
The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has today responded to the ECB’s consultation on Cyber Resilience Oversight Expectations (CROE) for Financial Market Infrastructures (FMIs).
The WFE’s response can be broken down into three categories:
/goo.gl/Qc6sMF

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Tuesday’s Top Three
Everyone loves a mystery: The Financial Times story The mystery trader who roiled Wall Street was our top story by a country mile on Tuesday. Next was Bloomberg’s Fund Managers Are Ditching Wall Street for Florida. Third was another story with ‘Wall Street’ in the title, Business Insider’s ‘They are pulling things out of thin air’: The war tearing apart Wall Street has reached a fever pitch

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MarketsWiki Stats
127,348,923 pages viewed; 23,148 pages; 213,300 edits
MarketsWiki Statistics

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Lead Stories

Donald Trump has shaken my faith that markets will remain free; A possible presidential pardon for Martha Stewart would have grave implications
Brooke Masters – FT
Donald Trump has finally shaken my faith in the US system. Compared with some of his other headline-grabbing moves, Mr Trump’s casual announcement on Thursday that he was considering a pardon for the domesticity guru Martha Stewart and his tweet on Friday that pre-announced positive jobs numbers may not seem like much. But to a firm believer in free and fair markets and the rule of law, they herald a fundamental decline in American institutions that worries me.
*****Don’t mess with the markets, I don’t care who you are. ~JJL

NFA to develop swaps proficiency requirements program
NFA
NFA’s Board recently approved the development of a proficiency requirements program for individuals engaged in swaps activities, which will be in the form of an online learning program with an embedded examination. This program will be applicable to all associated persons (AP) engaging in swaps activities, including those who are designated as swaps APs at futures commission merchants (FCM), introducing brokers (IB), commodity pool operators (CPO), and commodity trading advisors (CTA), and those individuals who act as APs at swap dealers (SD).
/jlne.ws/2sJDyzI

Study finds 68 per cent of crypto exchanges and wallets fail to perform client identity checks
Torjus Roberg – City AM
A study by P.A.ID Strategies found that 68 per cent of the 25 most prominent cryptocurrency exchanges and wallets in the EU and US do not perform identity checks on their clients before allowing them to trade.
/jlne.ws/2Hp8fzi

Italian Markets Are Having Another Tough Day
John Ainger – Bloomberg
Italian bonds and stocks dropped as the country’s new government continued to unnerve investors and European Central Bank policy makers flagged the prospect of talks to end its debt-buying program.
/jlne.ws/2kS5pKf

A crypto trader setting up a hedge fund apologised for making so much money
Oscar Williams-Grut – Business Insider
Cryptocurrency traders have become well-known for conspicuous displays of wealth.
Rows of Lamborghinis were parked outside the recent Consensus conference in New York and some attendees blew off steam at after parties in exclusive clubs with champagne, vodka, and even drugs.
/jlne.ws/2JzDX23

World Bear Market Would Likely Start in Euro Zone, Gavekal Says
Cormac Mullen – Bloomberg
Investors on the watch for a bear market in global equities should keep their eyes on Europe, according to Gavekal Research.
“This animal is the sneaky sort and victims rarely see it coming,” said Charles Gave, founder of the Hong-Kong based asset-allocation consultancy, in a note to clients Wednesday. “If a bear market is to unfold, this will probably start outside of the U.S.”
/jlne.ws/2kQV6pV

Matt Murray Named Editor in Chief of The Wall Street Journal; Current executive editor succeeds Gerard Baker, who becomes editor at large
Executive Editor Matt Murray previously served as national editor, deputy managing editor and deputy editor in chief.
Lukas I. Alpert – WSJ
The Wall Street Journal named newsroom veteran Matt Murray as its new editor in chief, succeeding Gerard Baker, who oversaw broad changes to the news organization in his 5½-year tenure as it dealt with a fading print-advertising business and the rise of digital journalism.
/jlne.ws/2sKU2aD

BlueCrest and Virtu join Eris Exchange as equity partners
Finextra
Eris Exchange (Eris), a US-based futures exchange group offering swap futures as the leading exchange-based alternative to over-the-counter swaps, announced today that BlueCrest Capital Management and Virtu Financial have joined Eris as equity partners.
/jlne.ws/2Hlp3Hn

Lobbyists cash in on bitcoin
Ben White – Politico
The latest POLITICO Money podcast explains what’s happening with bitcoin and other cryptocurrencies, including the potential for new federal oversight and congressional scrutiny. POLITICO’s Colin Wilhelm explains how lobbyists are cashing in on the crypto craze and describes what it was like inside a recent industry conference in New York that featured Lamborghinis on the streets and Wall Street bankers and tech nerds in the meeting rooms.
/jlne.ws/2kSQQGB

Exchanges, OTC and Clearing

Record volumes in Eurex’ Italian BTP segment
Eurex
In May, Eurex’ Italian BTP segment saw record volumes that were triggered by the forming of the new government. Traded volume more than doubled year-on-year reaching 7 million (+126 percent) while open interest stood at 0.7 million at month-end (+0.2 percent YoY). Overall Eurex’ interest rate segment grew by 45 percent (YoY).
/jlne.ws/2sQeozx

Scout24, Delivery Hero and Puma included in MDAX index; Siemens Healthineers rises in TecDAX; Deutsche Börse reviews composition of its indices; changes take effect on 18 June 2018
Deutsche Börse
Deutsche Börse announced changes in its stock indices with effect from 18 June 2018 on Tuesday. The shares of Scout24 AG, Delivery Hero AG and Puma SE will be included in the MDAX Index.
/jlne.ws/2Hp4uKi

T7 Release 6.1: Important information for production start
Eurex
Deutsche Börse Group will launch Release 6.1 of the T7 trading system on 18 June 2018.
/jlne.ws/2Hl5SO5

Introduction of Eurex Clearing Prisma Release 8.0
Eurex
With this circular, Eurex Clearing provides information on the introduction of the mandatory Eurex Clearing Prisma Release 8.0, which focuses on the new Time To Expiry Adjustment (TEA) and Transparency Enabler (TE Files).
/jlne.ws/2sFqqLG

Swiss supervisors recognise Eurex Clearing as foreign central counterparty
Eurex
Eurex Clearing AG has been recognised as a foreign central counterparty by the Swiss Financial Market Supervisory Authority (FINMA) under the Financial Market Infrastructure Act. Furthermore, the Swiss National Bank classified Eurex Clearing as a systemically important financial market infrastructure for the stability of the Swiss financial system. The new set-up enables Eurex Clearing to continue to serve its clients in the Swiss markets as usual.
/jlne.ws/2Hn2li0

Toronto Stock Exchange and TSX Venture Exchange Head to California
TMX
TMX Group today announced the arrival of the 2018 U.S. Public Venture Capital (VC) Roadshow in California. These events, showcasing Canada’s premier equity exchanges Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV), explore the unique value proposition TMX Group’s ecosystem represents for early-stage U.S. based companies and how public VC has evolved into a viable means of raising capital. The California leg of the tour opens today in San Francisco, moves to Irvine on June 6 and wraps up in Santa Monica on June 7.
/jlne.ws/2HlPHA4

TMX Group Closes Private Placement Offering of C$200 Million 3.779% Senior Unsecured Debentures Due 2028
TMX
TMX Group Limited (“TMX Group”) today announced that it has closed a Canadian private placement offering (“the Offering”) of C$200 million aggregate principal amount of 3.779% Series E Senior Unsecured Debentures due June 5, 2028 (the “Debentures”) to accredited investors in Canada. The Debentures are direct senior unsecured and unsubordinated obligations of TMX Group and rank pari passu with all other senior unsecured and unsubordinated indebtedness of TMX Group.
/jlne.ws/2HnlJfb

ASX Monthly Activity Report – May 2018
ASX
/jlne.ws/2HprQzg

Intercontinental Exchange Reports May Statistics; ICE Average Daily Volume (ADV) +19% y/y
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported May 2018 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at http://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
/jlne.ws/2Hl73wZ

MTS Bondspro Partners with Bondcliq to Improve Data Access inUS Corporate Bond Market
London Stock Exchange Group
MTS BondsPro partners with BondCliQ to improve data access in US corporate bond market; MTS BondsPro will stream live pricing information on over 20,000 bonds to BondCliQ system; Provides traders with comprehensive real-time view of the US corporate bond market; MTS BondsPro connects markets across the US, Europe and Asia with a 22-hour trading day
MTS Markets International, part of London Stock Exchange Group (LSEG), and BondCliQ, a new corporate bond market data solution, have partnered to provide BondCliQ users with data from MTS BondsPro all-to-all electronic trading platform for corporate bonds.
/jlne.ws/2sJEQe4

CME Group Chairman and Chief Executive Officer to Present at Sandler O’Neill Conference
CME Group
CME Group announced today that Terry Duffy, CME Group Chairman and Chief Executive Officer, will present at the Sandler O’Neill 2018 Global Exchange and Brokerage Conference in New York on Thursday, June 7, at 10:30 a.m. (Eastern Time).
/jlne.ws/2sKbcVL

Acquisition of Westfield Corporation by Unibail-Rodamco
Euronext
Following the successful acquisition of Westfield Corporation by Unibail-Rodamco, the new Group has been listed today on Euronext Amsterdam and Euronext Paris. The new Group opened the trading day in both Euronext marketplaces, which denotes the first trading day. The company aims to release its new branding on 7 June 2018.
/jlne.ws/2sI0UWo

Yellow Cake heads for London listing to bet on uranium ‘mispricing’; Investment vehicle will buy 8.1m pounds of the radioactive material
Neil Hume, Commodities and Mining Editor – FT
A new company planning to make a big bet on the price of nuclear fuel uranium has announced plans to float on the London Stock Exchange.
/jlne.ws/2HpmYKu

Fintech

GreenKey Files Patent on Fast, High-Accuracy Transcription Using Multiple Engines
GreenKey
GreenKey Technologies, creator of an artificial intelligence (AI) and voice-driven collaboration tool for financial market participants, announced today that the U.S. Patent and Trademark Office has accepted its application for improved speed and transcription accuracy of automatic speech transcription based on multiple speech-to-text engines.
/jlne.ws/2Jv9dzf

America May Need to Adopt China’s Weapons to Win Tech War
Michelle Jamrisko and Craig Torres – Bloomberg
Behind the daily skirmishes over tariffs, the U.S. and China are gearing up for a longer-term battle between two very different systems of innovation. To win, America may need to start using some of its rival’s weapons.
/jlne.ws/2kTvKYA

American tech giants are making life tough for startups; Big, rich and paranoid, they have reams of data to help them spot and buy young firms that might challenge them
Economist
IT IS a classic startup story, but with a twist. Three 20-somethings launched a firm out of a dorm room at the Massachusetts Institute of Technology in 2016, with the goal of using algorithms to predict the reply to an e-mail. In May they were fundraising for their startup, EasyEmail, when Google held its annual conference for software developers and announced a tool similar to EasyEmail’s. Filip Twarowski, its boss, sees Google’s incursion as “incredible confirmation” they are working on something worthwhile. But he also admits that it came as “a little bit of a shock”. The giant has scared off at least one prospective backer of EasyEmail, because venture capitalists try to dodge spaces where the tech giants might step.
/jlne.ws/2Hq14XB

Former MarketAxess Europe boss joins fintech as CEO
Algomi, which aims to improve liquidity in the bond markets, has named the successor to co-founder Stu Taylor
Samuel Agini, Financial News
Algomi, a financial technology company backed by AllianceBernstein, Euronext and S&P Global, has appointed a former MarketAxess boss as chief executive, starting a new chapter in its efforts to improve liquidity in the bond markets.
/goo.gl/2GQKVV

Cryptocurrencies

From Crypto to Credit Markets: Key Themes at Bloomberg Invest
Anny Kuo – Bloomberg
From cryptocurrencies to market conditions to investment opportunities, here are the key takeaways from the Bloomberg Invest conference in New York.
/jlne.ws/2kSMP51

Finance Industry Slams Google’s Crypto Ban As ‘Unethical’ and ‘Unfair’
CCN
Finance industry executives have argued that Google’s decision to ban cryptocurrency advertising is not only ill-conceived, but unethical. In Facebook and Twitter have enacted similar bans. The ban covers cryptocurrencies, ICOs, crypto exchanges, crypto wallets and crypto trading advice.
/jlne.ws/2Jvakip

Money20/20: Central Bank Execs Conclude Crypto Is No Threat to Fiat, Yet
Molly Jane Zuckerman – CoinTelegraph.com
Representatives from multiple central banks discussed whether or not cryptocurrency could spell the end of fiat currencies during the Money20/20 conference in Amsterdam today, June 5.
During a panel talk titled “Cryptocurrency, the Central (Bank) Question”, representatives from the Swiss National Bank, the Bank of Lithuania, the Bank of England, and the Bank of Canada took turns responding to the question “Can cryptocurrencies spell the end of fiat currencies?”.
/jlne.ws/2JzwMaa

Nasdaq CEO: Cryptocurrencies Are at ‘Height of Hype’
Ana Alexandre – CoinTelegraph
In an interview on Bloomberg Businessweek on June 5, Adena Friedman, president and CEO of Nasdaq Inc., said that cryptocurrencies are at “the height of a hype cycle” and can become a “financial element of the Internet.”
Speaking on how Nasdaq looks at disruptive technologies and instruments like cryptocurrencies, Friedman said that the corporation has been taking a research-oriented approach to when and whether they want to be involved in digital currencies. Friedman said that she believes the construct of cryptocurrency is beginning to become one the company can understand, and has potential to become a financial element of the Internet.
/jlne.ws/2JtTrol

Cryptocurrency exchange Huobi plans its first decentralised blockchain, says CEO Leon Li Lin
Yingzhi Yang – South China Morning Post
Huobi, the world’s third largest cryptocurrency exchange by daily trading volume, plans to build its first public and decentralised blockchain and fund it with 30 million Huobi Tokens worth about US$174 million.
/jlne.ws/2kVGIMZ

Crypto Exchange Bitfinex Resumes Operations After Hacker Assault
Camila Russo – Bloomberg
Denial-of-service attack had been launched against website; Exchange lost $68 milllion from another hack in August 2016
Bitfinex, one of the largest cryptocurrency exchanges, said it has resumed normal operations after suffering a so-called denial-of-service attack earlier.
/jlne.ws/2sIORYJ

Jim Chanos: “Cryptocurrency is a security speculation game masquerading as a technological breakthrough”
Lynn Parramore – Ineteconomics.com
The “dean of short sellers” says bitcoin is the last thing he’d want to own in the event of a catastrophe.
/jlne.ws/2Hn6ZNd

Crypto Whales Own Almost Half of the Tokens From the Biggest Ever ICO
Olga Kharif – Bloomberg
Block.one raised more than $4 billion in recent offering; EOS Tokens have a market cap of more than $12 billion
Beware of the EOS whales. The top 10 holders of the digital tokens from the largest initial coin offering ever own nearly 50 percent of the coins, according to tracking service Etherscan. Block.one, the private company behind the project that completed the more than $4 billion offering last week, is the biggest holder, with 10 percent of the total. The names of the other large holders are anonymous and could be individuals or even exchanges.
/jlne.ws/2sNwLFg

Blockchain and cryptocurrency jargon buster; Bitcoin, Ethereum, mining — distributed ledger technology decoded
Chloe Cornish – FT
These are some of the key concepts and terms to understand when talking about blockchain technologies.
/jlne.ws/2sJKixs

Ripple and Swift slug it out over cross-border payments; More than 100 banks have signed up with the blockchain-based challenger but the incumbent is fighting back
Martin Arnold – FT
A rivalry is raging that looks set to decide how cross-border payments are handled for decades to come. It is a contest that encapsulates much of the debate about blockchain and cryptocurrencies, pitting a start-up company betting heavily on these new technologies against a long-established group arguing for more incremental change.
/jlne.ws/2sK6PKl

One Firm Is Way Ahead of Wall Street on Bitcoin
Nathaniel Popper – NY Times
While a number of large financial institutions have discussed trading Bitcoin, one firm has already begun doing it. Very quietly. The financial firm, Susquehanna International Group in Bala Cynwyd, Pa., just outside Philadelphia, is one of the largest players in trading traditional investments like stocks, options and exchange traded funds, or E.T.F.s. Over the last two years, the privately owned company has also built up a trading desk of around a dozen people that buys and sells millions of dollars’ worth of Bitcoin and other virtual or cryptocurrencies in private deals.
/jlne.ws/2HoTFrt

Politics

David Koch Steps Down From Company, Political Groups; Letter to Koch Industries employees attributes decision to deteriorating health
David Koch, shown above in 2013, announced his retirement Tuesday.
Julie Bykowicz – WSJ
Billionaire businessman David Koch, who along with his brother has used his fortune to help reshape Republican politics, announced Tuesday that he is retiring from his family-owned company and all political organizations.
/jlne.ws/2Hpl1xD

A Costly, Deadly Obsession With Coal
Greg Ip – WSJ
President Donald Trump’s efforts to revive coal mining have been criticized as picking winners. Actually, it’s more like picking losers: coal has become a sunset industry as cleaner energy sources rapidly get cheaper. If Mr. Trump succeeds at reversing the tide, it will come at a steep price, in both dollars and lives, most tragically for the coal miners he purports to help.
/jlne.ws/2Jx7lG4

Mnuchin Favors Less Sweeping Investment Limits for China, Sources Say
Jenny Leonard – Bloomberg
Trump meeting with GOP lawmakers to talk China on Tuesday; Treasury due to present investment restrictions by June 30
The Treasury Department wants President Donald Trump to rely on legislation to tighten scrutiny of Chinese investments in the U.S. instead of an executive move imposing sweeping new limits, according to three people familiar with the matter.
/jlne.ws/2HnQd0l

Why Trump’s Trade War Isn’t Worrying Most Economists, Yet
Andrew Mayeda – Bloomberg
President has infuriated trading partners with tariff moves; Economists say real risk would be sliding business confidence
President Donald Trump’s zeal for tariffs has yet to derail the global economic outlook. While Trump has sown confusion and frustration among fellow political leaders, economists at most Wall Street banks are barely changing their forecasts for solid global growth this year as they estimate only modest fallout from a skirmish over commerce.
/jlne.ws/2HmF0xh

EU presses ahead with retaliation against US on steel
Jim Brunsden – The Financial Times
The European Union has confirmed it plans to target some EUR2.8bn of annual US imports with punitive tariffs as it gears up its retaliation against Washington’s decision to hit European steel and aluminium with additional duties. The European Commission said on Wednesday that it had decided to press ahead with imposing extra duties on a list of US products it prepared several weeks ago in response to Donald Trump’s tariff threat.
/goo.gl/e26zk6

U.S. Asks OPEC for 1 Million Barrel a Day Oil Output Hike
By Jennifer Jacobs , Javier Blas , and Grant Smith – Bloomberg
President Trump criticized OPEC for raising prices too high; Saudis, Russia have proposed gradual increase in second half
The U.S. government has quietly asked Saudi Arabia and some other OPEC producers to increase oil production by about 1 million barrels a day, according to people familiar with the matter.
/jlne.ws/2Hn7nv6

Schultz gives up coffee to test presidential waters; Former Starbucks executive discusses political principles as he considers White House run
Courtney Weaver in Washington – FT
There is dipping your toe in the water. And then there is plunging into the deep end, headfirst, a metaphor that describes the recent strategy of Howard Schultz.
/jlne.ws/2HnsvBA

Cambridge Analytica chief accused of taking $8m before collapse; Investors press for repayment after Nix alleged to have acted on Facebook reports
Aliya Ram and Cynthia O’Murchu in London – FT
Investors who backed a rebranding of Cambridge Analytica are in a stand-off with former chief executive Alexander Nix after he allegedly withdrew more than $8m from the scandal-hit data firm shortly before it collapsed.
/jlne.ws/2HpXxbN

Regulation

FCA fines and imposes a restriction on Canara Bank for anti-money laundering systems failings
FCA
Financial services firms are required to maintain robust anti-money laundering (AML) systems and controls, since they are at risk from those seeking to launder the proceeds of crime or to finance terrorism.
Between 26 November 2012 and 29 January 2016, Canara failed to maintain adequate AML systems and failed to take sufficient steps to remedy identified weaknesses, despite having been notified of shortcomings in its AML systems and controls.
/jlne.ws/2kQw6iD

SEC Modernizes the Delivery of Fund Reports and Seeks Public Feedback on Improving Fund Disclosure
SEC
Yesterday, the Commission voted to improve the experience of investors who invest in mutual funds, ETFs and other investment funds. In three related releases, the Commission provided a new, optional “notice and access” method for delivering fund shareholder reports, invited investors and others to share their views on improving fund disclosure and sought feedback on the fees that intermediaries charge for delivering fund reports. These actions are part of a long-term project, led by the Division of Investment Management, to explore modernization of the design, delivery and content of fund disclosures for the benefit of investors.
/jlne.ws/2sJrBdn

ERI: Introducing FINRA’s Weatherman
FINRA
FINRA can’t predict the future, but like a weatherman, it can make predictions based on circumstances that exist today.
/jlne.ws/2sIU56N

Proposed Rule Change to Amend FINRA Rule 6730 Relating to ATS Reporting of Transactions to TRACE in U.S. Treasury Securities
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend Rule 6730 to require alternative trading systems (“ATSs”) that report transactions in U.S. Treasury Securities to the Transaction Reporting and Compliance Engine (“TRACE”) to identify non-FINRA member subscribers on those transaction reports.
/jlne.ws/2Hnwz4N

SEC’s Clayton To Advocate For Better Cybersecurity
PYMNTS.com
The chairman of the U.S. Securities and Exchange Commission (SEC) is calling for more money from Congress to protect itself against “advanced” and “persistent” cyber threats.
/jlne.ws/2HrzAkE

Investing and Trading

Janitors Are Becoming Millionaires Thanks to This Stock’s 9,500% Rally
Bloomberg News
Sunny Optical’s unusual move enriched about 400 workers; The stock is one of the world’s best performers since 2008
At most big companies, it’s pretty clear who the millionaires are: top executives, rainmakers, science whizzes with PhDs. But at China’s Sunny Optical Technology Group — whose stock has climbed faster than any other in MSCI Inc.’s global indexes over the past decade — the richest employees are just as likely to be factory workers, janitors and cafeteria chefs.
/jlne.ws/2HnOacF

Institutions

Hedge fund Caxton’s Europe operations take a huge hit to profits as top pay is axed
Lucy White – City AM
The European division of hedge fund giant Caxton Associates, which has more than $16bn (£12bn) in assets under management, took a huge hit last year as profits fell more than 92 per cent from £95.8m to just £7.2m.
/jlne.ws/2sIR9ah

TSB chief receives stinging rebuke from City watchdog; Bank failed to be ‘open and transparent’ over IT meltdown affecting 1.9m customers, says FCA
Angela Monaghan – The Guardian
The City regulator has launched a stinging attack on the chief executive of TSB over the bank’s failure to be open and transparent with customers when an IT upgrade went badly wrong, locking as many as 1.9 million customers out of their accounts.
/jlne.ws/2sGTxyp

ANZ, Citi, Deutsche Bank Accused of Engaging in Cartel Conduct; The case, related to a 2015 ANZ fundraising, is set to go before a Sydney court on July 3
Robb M. Stewart – WSJ
Australia’s antitrust regulator has taken the unusual step of criminally charging one of the country’s biggest banks and two underwriters of a 2015 fundraising round for the bank. It alleges cartel conduct.
/jlne.ws/2sJATWM

‘There’s an ETF for That’ Mindset Comes for Mortgage Securities
By Annie Massa – Bloomberg
BlackRock’s iShares chief touts ETF changes in fixed income;l Firm sees global ETF assets growing to $12 trillion by 2023
The growth of exchange-traded funds has helped transform equity markets over the past decade. Now they’re eyeing mortgages.
/jlne.ws/2Hp3Koo

Former Goldman banker Byron Trott plans fundraising
Eric Platt and Mark Vandevelde in New York – The Financial Times
Byron Trott, the longtime adviser to billionaire investors including Warren Buffett, is in discussions to raise a new private equity fund, tapping into the growing demand for such investments from wealthy families. The former Goldman Sachs banker, who founded the investment management and advisory firm BDT Capital in 2009, is expecting that the new vehicle will eclipse the size of his two previous funds. He has set a target of $9bn, according to three people with knowledge of the talks.
/goo.gl/dN6mu7

Credit Suisse to pay $47m to end DoJ ‘princelings’ probe
Don Weinland in Hong Kong – The Financial Times
Credit Suisse has agreed to pay $47m to settle a US Department of Justice probe into hiring practices in Asia that involved the Swiss bank recruiting so-called princelings to win business. The scandal surrounding the hiring of the sons and daughters of powerful political families in China rocked several US and European banks starting in 2013, when the US Securities and Exchange Commission launched an official investigation into whether the practice violated the US Foreign Corrupt Practices Act.
/goo.gl/gBru18

Regions

Default Risk in Asia Is Rising as Governments Allow Failures
By Denise Wee – Bloomberg
India is pushing debtors into courts, China allowing defaults; China Energy Reserve, Noble, Hsin Chong defaulted in 2018
Asian companies face increased risk of default as politicians in the region accept more corporate failures, adding to strains as refinancing costs climb.
/jlne.ws/2HnQzEd

StanChart Plans to Split Asia Into Singapore, Hong Kong Hubs
By Ambereen Choudhury and Stephen Morris – Bloomberg
Move intended to simplify bank’s network, capital structure; Sale or spin-off may also be considered later: sources
Standard Chartered Plc plans to create two new hubs for its Asian operations in Singapore and Hong Kong to simplify the emerging market lender’s extensive network and reduce costs, people familiar with the plan said.
/jlne.ws/2Hp1tcW

Brexit

Pressuring May, Labour tries to force new single market deal
Reuters Staff
The Labour Party threw down the gauntlet to Prime Minister Theresa May on Brexit on Tuesday, offering potential rebels in her Conservative Party a way to defy her by voting for a new single market deal with the EU.
/jlne.ws/2sIkp0U

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